House Down Payment question....

There are additional payments that will be added to your monthly payment for less than 20 (or in my case 22) percent down. I went with a THDA (Tennessee Housing Development Agency) loan that required 22% to avoid the extra mortgage insurance which I believe it was called PMI. I have a buddy that put only 3% down, and he has significantly higher payments because of it. It is all about how far into debt you want to start off.

In my case, I had a CD at the bank from old medical insurance payments and a family inheritance from my grandfathers passing that I used for my down payment. A good starting point would be to just go to either a bank with a mortgage department or a company that does strictly housing loans and just ask questions and have them give you good faith estimates. No need to have them run your credit report at this time though. Just be aware that once you go to one, they will stay on top of you until you tell them you have gone with another company for your loan. I would also be happy to give you the information of the company that I found most useful, friendly, and reasonable. Once you start seriously looking at homes with a real estate agent, they will also give professional references, but I found it was due to them being solid business partners, not the best rates.

I am not going to put it on here, but if you want to see some of the information I received and the good faith estimates to see some examples, let me know.

Before you get discouraged though, just simply ask a mortgage dept, perhaps at your local bank, and see what the different rates would be. Another good resource is www.daveramsey.com/tools/mortgage-calculator/ to see what your payments would look like. When you use this though, it doesn't include homeowners insurance or property tax which is added to the payments and paid by the bank. This added roughly 90-100 a month for me.

I'm not necessarily discouraged, just surprised that so many people I know are able to afford a down payment. We're the same age, in the same income bracket... and yet....

What I currently pay in rent could easily be spent on a mortgage payment. My problem is the down payment part. 20% or even 3%, it would take a while. Ideally, I'd want to put as much down as I could, but it would literally take about 10 years for me to save enough (I mean, it took me almost 3 years to save for a car down payment!). Unless there is an act of the money gods, I will be renter for life and quietly covet cute houses I find for sale

Three percent down you can certainly do, don't give up so easily. When we were saving for the 1st house we made one of those little thermometer looking things that you see for fundraisers and hung it on the fridge. Then every time we had a little extra cash we popped it in, as little as ten bucks. Any mail in rebates, a little tax refund money, the money I made doing voice overs was extra and helped a lot, sell a few dvd's, cd's, birthday money etc. Our families knew we were saving so for a couple of birthdays/holidays we got cash instead of stuff.

One thing I would strongly suggest is that you put the money into an online savings account. The interest is higher and it's harder to get to quickly.

Our first mortgage was an FHA so we only needed 3-5% down.

Also, I don't know what kind of work you do but something I did when my son was little was some tax preparation with one of the big name companies. The classes are free and I worked a few hours in the evening a few days a week and the cash helped fill in some holes we had.

Good luck! Let us know when you get started and we'll all cheer you on and maybe even send you a buck.

^^^^You're right, the economy sucks. I've been at my current job for going on 7 years and haven't had a raise in 3 years now. I feel your pain.

First, make sure you are looking into first-time homeowner programs. You can usually get a good deal of fees waived and a lower downpayment.

Second, when I bought a house a decade ago, I got a lot of the downpayment from my 401K. You are allowed to take up to 50% out of most plans. If you have one and you are would rather invest that portion in your house instead of whatever your fund is doing, that may be an option for you. Just a thought, though it's certainly not for everybody.

I only put 10% down on my house (and yes, it was a loan from my mom from my dad's insurance money), which put me in PMI territory. But I was able to finagle the seller paying both my PMI in an up-front lump sum as well as my closing costs.

Look at the various HUD programs - I think there's a loan for first-time homeowners that has a low rate and low or nothing down. The co-op neighborhood I was buying into didn't allow such loans, but your ordinary single-family, townhouse or condo probably would be just fine with it.

But whatever you do, don't give into peer pressure. Anyone who is buying a house sooner than you either has a job that pays a heck of a lot more (I have a lot of lawyer friends who all bought 5-10 years before I did), have parents who can give them money for the downpayment and/or pay their mortgage for them (those folks will never tell) or get stuck in a house that's too far away from anything. Or they're house-poor. They have a great house in a fab neighborhood, but can't furnish it, can't go on vacation, can't eat out, etc.

I very happily lived in a studio apartment for 8 years until I was at a point in my life where I could comfortably afford higher monthly payments (even if your mortgage is the same as your rent, utilities are usually more plus there's upkeep costs every single freaking month) and where I didn't care so much about living in a "cool" neighborhood or even in the city. I now live in an area that most people in the DC area look down upon, but for those who know, it's this awesome place with a small-town vibe though still just 20 minutes outside of DC. But I never would have seen myself living here even three years ago.

And another bonus about renting? You can leave whenever you want. If you're in a year lease, you'll have to pay for breaking it, but that's small potatoes compared to what a foreclosure does to your life. And if something breaks, you call your landlord. Appreciate the freedom. I often wish I still had it.

Yep! We almost bought a house recently (we were going to do a USDA guaranteed loan that doesn't require a down payment), but at the last minute, we decided not to. The other day, we had a really bad storm. The wind blew some of the siding off our apartment, and rain starting coming in through the ceiling of our downstairs. I just kept thinking, "I'm so glad someone else has to pay to fix this."